Thursday, July 30, 2020


The Daphne murder public inquiry hearing notes say it all this week: apparently nobody wants to admit that the acquisition of a Panama shell corporation, by any Maltese government official, who is a Politically Exposed Person (PEP), is, by definition, either an attempt to evade taxes, or conceal bribes or kickbacks from public scrutiny, or both.

A shell company does no legitimate business; it merely exists to passively hold assets of the individual who owns the corporation. Unless there actually is a company operating some sort of business, it is therefore a shell company. Panama is known for the "Don't ask don't tell" willfull ignorance of its government over the uses of its shell companies by tax evaders, drug traffickers and corrupt PEPs. It is a lucrative business, limited by law to lawyers, that are the only ones who are authorized to engage in corporate formation.

Of course, you cannot tell if anyone in Malta has a clue about the true, and generally, sole, purpose of a Panama corporation. Here are some quotes from this week's proceedings. Judge for yourself if we are looking at a pandemic of willfull ignorance of the law by Malta's best and brightest:

"Panama doesn't automatically mean money laundering"

"I also want to say that not every Panama structure is illegal."

"They have the Panama structures, which are not illegal in their own right."

Who are they kidding ? Unless you have an actual brick-and-mortar working business, with staff conducting some sort of business operation, the possession of a "virtual" Panama corporation, without any real company, is presumed by most law enforcement agencies to be evidence of some sort of crime. Face the truth, Malta, before you become the next Panama.

Meanwhile, as Malta delays taking any real action to reform, ahead of the next MONEYVAL meeting, we are seeing the first indications that things are already deteriorating;

(1) Maltese business travelers to the EU are returning and telling friends and associates that they are having problems doing business, strictly because they are identified as from Malta.

(2) A Swiss organization, The Basel Institute Anti-money Laundering Index, has now rated Malta as the highest-risk within the EU for money laundering and terrorist financing.

As Malta falls further down the rabbit hole, how will it climb out ?

Wednesday, July 29, 2020



Readers who have been following Malta's Pilatus Bank scandal know that approximately €120m in dirty money "diverted" from Venezuela was moved through Pilatus, enroute to shell and front companies, as a part of an elaborate €600m scheme. Given the current "Take no Prisoners" indictments as expressions of America's position on the Venezuelan regime, one can expect to see more indictments and forfeiture & seizure cases, so long as the corrupt Maduro regime remains in power, and given the extensive cooperation of Malta's financial institutions, and non-bank financial institutions, expect a number of Maltese professionals to be included.

Given the United States' Zero Tolerance for Venezuelan money laundering, with enforcement actions coming as an act of official policy, and Malta's obvious level of involvement with bad actors supporting Venezuela, directly or indirectly, one must expect that the spillover from America's financial attacks upon Venezuela and its patron, Iran, are bound to infect Malta, hitting especially hard upon its fnancial sector, and charging its corrupt past and present senior leadership. This means that one of the massive RICO or money laundering cases against Venezuela, coming down the pike in the near future, will include Maltese bank officers and elected leaders. These will be large, complex cases, with multiple defendants, some of whom may have already commenced their cooperation with US law enforcement, siuch as Ali Sadr Hasheminejad, in order to benefit from immunity's "Get-out-of-Jail-Free-Card" ?

Did Reza Zarrab implicate Ali Sadr, who rolled over on others ? Did Pilatus' officers & directors, such as Hamidreza Ghanbari, who was named a co-defendant, and Luis Felipe Rivera, implicate Maltese government officials, whether elected leader, law enforcement, or regulators ? We cannot say for sure, but the indications are there that someone has been talking.

Remember also that a number of confirmed career Venezuelan and Iranian money launderers who have been either linked to Maltese banks, or are actual depositors therein. Those individuals may choose immunity over prison time in the US, giving up their banking relationships in Malta when detained by American law enforcement agencies, and presented with some hard choices. That may cause attorneys and corporate service providers in Malta to lose sleep, worrying over when the proverbial 'Knock on the Door" will come;  let them remain restless until that day.

Image credit Miami Herald.


The US Attorney has filed its Government's Memorandum of Law in Opposition to Halkbank's Motion to Recuse,  which seeks to change the judge assigned to the case, on the grounds that he cannot be fair and impartial. The Government-owned defendant bank has been charged with Money Laundering, Violation of the IEEPA, Bank Fraud and Conspiracy, for its participation in Iran sanctions evasion, to the tune of billions of dollars. Trade-based money laundering, falsified documents, front companies, payment intermediaries, and accounts in the UAE and elsewhere in Turkey were employed in the massive scheme.

The Government's 36-page memorandum of law details how Recusal is not supported by either the Court's comments, rulings, participation in a 2014 Turkish symposium, nor statement made during pre-arraignment proceedings. It states that the true purpose of the Defendant bank's motion "is not about curing the appearance of impropriety, but rather the Bank's 'seeking to avoid the adverse consequences of the Court's presiding over the bank's case." (Memorandum at 7). Co-defendant Reza Zarrab pleaded guilty, and bank General Manager Mehmet Atilla was convicted by a jury.

A fair reading of the memorandum shows that grounds for Recusal do not appear to exist. We await the Court's ruling.

Tuesday, July 28, 2020


Skerrit & Monfared

Roosevelt Skerrit, the Prime Minister of Dominica, has fleeced the people of the Commonwealth of Dominica for years, drawing huge sums for a residence, while staying rent-free at State House, the Official Residence of the President. If you think this is both improper and excessive, wait until you see what his plans are for the coming year; A Bloody Palace.

According to information furnished from official records by Opposition leader Lennox Linton:

(1) In 2018-2019, Skerrit drew EC$310,139, while living for free at State House.

(2) In 2019-2020, Skerrit collected EC$544,484 for official housing, while again living at State House.

It gets worse; we recently reported that Skerrit was engaged in setting up a Presidential Palace. His cooperative Cabinet has approved the costs, by illegally designating the funds as being drawn from the Contingency Fund for Unforeseen Expenditures, thereby keeping the actual figures outside of public view and approval. The total for 2020-2021 is reported to be, including building rental costs, staff and expenses, a grand total of EC$771, 000. That's $64,000 per month.  Can you say financial obscenity ?

This lavish palace is being prepared while Dominicans struggle under the COVID-19 pandemic, the damage from a tropical storm followed by a hurricane, a failed agricultural sector, and zero local industry. All this from the man who would be king.

Monday, July 27, 2020


An Amicus Curae filing in the Ali Sadr Hashimenejad Iran sanctions case, filed by an attorney at the Criminal Justice Clinic at Howard University School of Law, has zeroed in on what the staff attorneys in that case called "burying" Brady material, and engages in finger pointing regarding what is alleged to be an office culture mandating convictions at the expense of the proper disclosure of exculpatory evidence, and which deems such misconduct to be acceptable.

The author focuses on possible prosecutorial misconduct, and asserts that dismissal of the charges against the defendant is an insufficient remedy; he demands accountability and consequences for those who were involved, for what are said to be repeated violations.

The issue of whether the defendant's cooperation reached the exalted level where the prosecutors actually facilitated the dismissal of a very guilty defendant still remains without an answer. The Amicus letter will not, unfortunately, resolve that question.

                                                                  Read the letter below:

Sunday, July 26, 2020


Let me draw your attention to Catherine Belton's book, Putin's People: How the KGB took Back Russia and then Took on the West, at page 417:

" The crusading journalist Daphne Caruana Galizia, renowned for her investigations into corruption in her native Malta, had warned of the possible consequences when she spoke to a Member of Parliament shortly before she was killed in a bomb attack in 2017. 'She came to see me in my office," said the MP, 'and told her Russian and Azeri money had bought the whole of [the Maltese government] and they were sending it all to London. She told me, 'There's a wall of cash heading to London...."

Remember the £17m London mansion that Caruana asserted that Brian Tonna had purchased through Willerby Trace Inc., using Pilatus' London shell bank as the vehicle funnel the money into the UK ? How many other mansions, office buildings, and busineses have been purchased through this anonymous London Pilatus branch bank ? Ali Sadr Hasheminejad publicly said that Pilatus was "flying the flag for Malta in London." Perhaps he meant the flag of the Islamic Republic of Iran. The money though, came from Iran and Russia, with a contribution from corrupt PEPs in such places as Azerbaijan.

 Visitors to the bank's address, 4 Old Park Lane, in London's fashionable Mayfair district, cannot find any signs or notices indicating that a bank actually operates here. I know that from my personal experience, having walked down that street many times. It's not an office building.

The building manager in the lobby refuses to let visitors upstairs, to the bank's alleged offices, claiming that there's nobody there, and he does not know when they will return. He also will not identify any of the bank staff or officers by name, or telephone number. It is clearly a convenience address, where dozen of other shell or shelf companies exist virtually. Can you say brass-plate bank, anyone ?

Just as Canada has become an investment destination for Iranian "flight capital," the United Kingdom has also become a home for Iranian money, and obviously Pilatus Bank was one of the principal facilitators. Whether the funds were transferred by Ali Sadr, Hamidreza, or Armin, Iranian cash flowed into Pilatus' Malta headqurters, and in a milisecond, was credited to the bank's London branch, thereafter to be integrated into London's pricey real estate, its dark origins completely obscured through the proper application of the principles of money laundering. And still nobody in Malta has been charged with a crime.

Saturday, July 25, 2020


Pilatus Bank CEO Hamidreza Ghanbari

We have been exploring any illicit connections between the participants in a number of billion dollar Iran sanctions evasion schemes, and the officers and directors of the now-defunct Pilatus Bank of Malta, and have noticed something that takes us in another direction: the Commonwealth of Dominica; And it gets curiouser and curiouser.

Why does Pilatus Bank's Chief Executive Officer, the Iranian national HAMIDREZA GHANBARI, hold a Citizenship by Investment (CBI) passport and citizenship from Dominica ? He actually listed his nationality as Dominican when reporting to regulatory agencies. Some of his filings state that he claimed to reside in Malta; in others, he asserted that he lived in Dubai, UAE. Neither says he lives in Iran.

His boss, Pilatus Bank owner Ali Sadr Hasheminejad, acquired several passports from the Federation of St Christopher (St Kitts) & Nevis; so why didn't Sadr secure Kittitian passports for his CEO  at the same time ? What is so important about holding that Dominica CBI passport, we wonder.

Dominica was, of course, the East Caribbean state that sold not only CBI passports, but also diplomatic passports, to ALIREZA MONFARED, who was described in the press as the "Right Hand Man" of sanctions evasion king BABAK ZANJANI.  Zanjani is still facing a death sentence in Iran for his theft of €2bn; Monfared was sentenced to twenty years for his role.

"Diplomat" Alireza Monfared and Dominica Prime Minister Roosevelt Skerrit

The number of other Iranian nationals holding Dominica CBI passports and diplomatic passports is not known, because Dominica's Foreign Ministers have deemed that information to be confidential, even withholding it from the elected members of the House of Assembly, the country's Preliament. Therefore, we do not know how many Iranians engaged in the oil sanctions evasion scheme are traveling on Dominica passports, whether CBI or diplomatic.

The other major player in the Iran sanctions evasion crew, REZA ZARRAB, who has apparently cheated justice for his crimes through extensive cooperation with US law enforcement, operated with both Zanjani and Monfared, and may have implicated Hasheminenejad as a co-conspirator in the laundering of Iranian oil profits diverted by the crew.

Reza Zarrab a/k/a Risa Sarraf

The other Iranian link that passes directly through Dominica is the Colombian national, ALEX NAIN SAAB MORAN, presently fighting extradition to the United States, where pending Federal criminal charges await him. Saab was literally en route to Iran, where he has a history of shipping over Vennzuelan gold, which helped Iran in its global oil sanctions evasion scheme, and were used to acquire dual-pupose goods for Iran's WMD and ballistic missile programs. Saab had two offshore corporations tht he formed in Dominica.

Alex Saab Moran's Antigua & Barbuda CBI passport

Where does Dominica, its local indigenous, as well as ofshore, banks, and its leadership, fit in regarding the sale of Iranian crude oil, and the laundering of illegal profits, as well as the purchase of duel-use goods for sanctioned weapons programs ? Perhaps If we knew the names of the Iranian nationals traveling around the globe with Dominica passports, we might be able to find some answers.

Coat of Arms of the Commonwealth of Dominica

Friday, July 24, 2020


Readers who are interested in reviewing the compete text of the Intelligence and Security Committee of Parliament, which was recently released, and which engages in finger-pointing regarding the laundering of illicit Russian money in the United Kingdom, may access the complete text here.


An Afghan-American businessman wanted for perpetrating a $15m Ponzi scheme has been arrested pursuant to an indictment issued in the Southern District of New York. NAIM ISMAIL, who reportedly is an American citizen, fleeced his victims by promising significant returns on their investment, while paying prior investors with funds received from new victims, in typical Ponzi style.  He was the vice president of unidentified investment firm. The defendant was reportedly arrested in Los Angeles.

One of the victims was the New York office of an unnamed Afghanistan bank. The charges against him include Bank Fraud, Wire Fraud, and Conspiracy to Commit Bank & Wire  Fraud. Since his arrest, the three-count Sealed Indictment (18 Crim 00791), filed in 2018, has been released to the public. It may be accessed here.



According to published remarks, Malta's Police Commissioner, Angelo Gafa, has stated that EUROPOL, the European Union Agency for Law Enforcement Cooperation, has declined to enter into a Joint Investigation Team (JIT), to inquire into the transnational crime aspects of the assassination of Maltese journalist and investigative reporter Daphne Caruana Galizia. Commissioner Gafa noted that he has conveyed that request to EUROPOL, when he was promoted to his present position, but that the agency had advised against a cooperative effort.

While the official reason given was that there was no basis for a JIT, because EU regulations require that there be a common objective by more than one EU Member State, there may be another, darker reason. A JIT would require EUROPOL to share intelligence with Malta's Police, the country's security services, and possibly other governmental agencies and entities. EUROPOL's  intelligence, regarding its previous investigation of specific Maltese leaders, past and present, could and probably would, illegally leak out from corrupt, ranking Maltese law enforcement agencies, and endanger Maltese and foreign nationals, who have covertly cooperated with EUROPOL agents.

Remembering that the previous Police Commissioner declined to even interview several of the prominent Maltese who are targets of the Daphne investiation, that the investigation has been pending for three years without any end in sight, and that Maltese law enforcement investigations often proceed at a snail's pace, for purely partisan political reasons, it is not a surprise that EUROPOL leaders have declined to enter into a joint investigation, for they obviosly fear that their intelligence will be leaked (read: sold) to targets of the investigation, and that physical harm might come to those who supplied the intel, including assassination efforts.

 We note that there are a half dozen previous unsolved cases in Malta where witnesses either in police custody or at risk passed away under suspicious circumstances, and often while in the hands of the police, and EUROPOL does not want to lose its witnesses,  especially when their addresses are shared with defense counsel, who may pass it along to lawyers for the targets. We understand why EUROPOL is keeping Malta's police at arm's length.

Thursday, July 23, 2020


The Annual Report of the French Anticorruption Agency (AFA) may be accessed here.


Recent communications between the US Attorney's Office in New York and counsel for Ali Sadr Hasheminejad may have given us clues as to the category of case that he has been assisting SDNY with, to warrant the AUSA agreement in ultimately dismissing all charges against him. Apparently, there was correspondence from counsel when the US Attorney website noted the dismissal, but failed to remove the article discussing the verdict. Counsel was concerned that Immigration might still deport him, based upon the original article published about the conclusion of the trial.

The objection was noted, and the "offending" article removed from the website. What is interesting to note is that the two prosecutors who interacted on behalf of the US Attorney at that time happen to be the Co-Chiefs of the office's International Narcotics and Terrorism Unit. Those individuals also were the co-signers of the last letter to the Court, which confirmed the US Attorney's agreement with the method of dismissal advocated by defense counsel. They promised, on the record, to "not seek or cooperate with any immigration removal proceedings against Sadr."

One of the signers is the Associate US Attorney for the Southern District, the number three position, in terms of rank, in that office, which one might expect, but the fact that he is also the Co-Chief for International Narcotics and Terrorism could mean that it was one or both of those subjects that Ali Sadr was assisting US law enforcement with. Remember, neither of those two individuals had previously appeared in the case, prior to the trial, but now they seem to have taken command.

A final note: court observers have openly wondered whether Daphne Caruana Galizia, the Maltese investigative jurnalist and blogger assassinated in Malta, had made a major discovery, and that she was killed to keep her from exposing the information she had uncovered. Was it terrorist financing, providing material support to Hamas or Hezbollah that was the reason for her violent death by a car bomb ? These terrorist organizations have popular support in Malta among the Palestinian Expat community there. And has Ali Sadr now supplied the evidence that Daphne's investigation exposed ? Stay tuned. 

Wednesday, July 22, 2020


The attached article is worth a read, after converting it from Estonian into English, because it provides compliance officers with a list of what government positions the Government of Estonia considers to be Politically Exposed Persons, or PEPs. Sometimes we forget to include certain categories of government officials in our definition of who is or who is not, a PEP. You can acccess it here.  

Tuesday, July 21, 2020


The Federal judge in Professor Bruce Bagley's money laundering case in SDNY has entered an Order of Forfeiture and a money judgment against the defendant, in the amount of $ 474,000. Bagley has agreed to pay, and must pay before sentencing, the amount of $ 232,000.

Sentencing has been scheduled for October 1, 2020 at 4:00 PM. The relevant portion of the Order appear below:


With the curious acquiescence of the US Attorney's Office, the trial judge in the Ali Sadr case has granted the defendant's Motion for a New Trial, and thereafter dismissed the case with prejudice. Given that the Court has not yet determined whether there were fatal Discovery violations under Brady, or whether there was actually prosecutorial miscondict tainting the case, we cannot determine if the result was truly the direct and proximate result of prosecutor's errors, whether intentional or negligent, or whether there is another agenda, not public, regarding Sadr's coperation, which is the primary reason all charges were dismissed, even after a jury verdict established his guilt, to the exclusion of a reasonable doubt.

Other issues remain below the waterline, and cannot be examined in the absence of clear and convincing evidence:

(1) Did the prominent Iranian-Turkish sanctions evader REZA ZARRAB, implicate Sadr, and is that the reason Zarrab's case was abruptly terminated, and he was inexplicably released from custody ?   Is Zarrab cooperating, not with US law enforcement, but our intelligence services ?

Reza Zarrab a/k/a Risa Sarraf
(2) Who or what has Ali Sadr cooperated against, and was that sufficient to make his case go away, under the pretence of prosecutorial negligence ? Are the targets Iranian sanctions evaders, Malta's money laundering operation for Venezuela, or some other individuals ?

Who in Malta was implicated ?

(3) Will the trial judge in this case proceed with the prosecutorial misconduct issue, and is there a culture of failure to disclose required Discovery in the US Attorney's office ?

So many important unresolved issues; we trust some answers will be forthcoming. Here is the Order:


A six month sentence of imprisonment, meted out to the girlfriend of a casino video technician at a Native American casino in Florida, who laundered $654,000 out of a total theft of $5.3m is clearly insufficient, especially given that the primary defendant, who was her live-in boyfriend, got 51 months. ANISLEYDI VERGEL HERMIDA, of Miami Beach, who pled guilty to Conspiracy to Commit Money Laundering, definitely did not receive a sentence commensurate with the seriousness of her crimes, even if she fully cooperated with the authorities after her arrest.

This defendant may have been given a short sentence due to minor children in the home, but the two defendants who were parents could have served their sentences during different periods, insuring that child care was not affected.

When businessmen, who might be in a position to launder money for others, for lucratie fees, see a short sentence like the one given to Hermida, they are simply not deterred for  following in her footsteps. Until and unless the courts give out sentences closer to the 20-year maximum provided for by law, to frighten off those who might otherwise be tempted, we will continue to see more money laundering cases each year.


For a number of years, we have reported that our sources in the East Caribban have seen evidence that governments in Antigua, Dominica and Grenada are illegally spying upon their citizens, through
software programs that allow them to read email and eavesdrop on telephone convesations. Now, confirmation has come from an unexpected place: Europe.

The authoritative german magazine Der Spiegel has named NICOLAS STEELE, the current Grenada Minister of Health, and former Minister of Foreign Afffairs, as the individual in the government of PM Keith Mitchell, whose official written correspondence with a German company confirmed his negotiations for the purchase of spy software capable of hacking smartphones.

If this wasn't sufficient confirmation that the government of East Caribbean states spy on their own people, ask some of the locals who are in Opposition parties. They will tell you stories about how their private political activities mysteriously became public knowledge, reducing their effectiveness in acting as checks and balances on Government violations of Constitutional rights.


Monday, July 20, 2020


Finantia Malta Ltd., is a local subsidiary of a foreign financial institution, Banco Finantia Group. It has zero employees or officers, but shows assets of €2bn. Here is what was said about the bank at the recent Daphne Public Inquiry, as summarized by the Independent:

"Azzopardi expresses surprise that the Pilatus director, Armin Eckermann, who gave the advice to sue Daphne Caruana Galizia, and who was required to approve all prospective clients, was a Director of  Finantia Malta Ltd.,  a company based in Malta. 'We have a director of a money laundering machine, who has ruined our reputation, and we will all suffer for it, being declared Fit and Proper by the MFSA. How did the MFSA declare him fit and proper ?" [Independent 1 July, 2020]

Banco Finantia lists the Malta location of Finantia Malta on its website, but an extensive search of Malta's MFSA website has failed to find the Bank as a regulated or licensed entity. See  Please explain how an unlicensed entity, which pays no taxes in Malta, and is supervised by an individual who does not, due to his experiences at Pilatus bank and elsewhere, fit the requirement of a fit and proper person, is allowed to operate in Malta ? How many other letterbox companies exist and thrive there, totally outside any supervision or regulation ?

Armin Eckermann, ex-Pilatus Bank Dir.

No wonder both the European Union and the United States have expressed not only their concern, but intention to take immediate action, regarding what is clearly a jurisdiction without any effective AML/CFT regulatory compliance.

Saturday, July 18, 2020


If you thought that the Government of Kuwait has a handle on suppressing corruption, think again. Seven Federal forfeiture cases filed in California have exposed the fact that former high-level officials in Kuwait's Ministry of Defense embezzled $104m public funds intended for military purposes,passed them from the National Bank of Kuwait into unauthorized bank accounts in London. The funds were falsely described as military expenditures. However, the funds were transferred to several California entities that had no business or contractual relationship wth the Ministry of Defense, which were controlled by  a Los Angeles man with  multiple convictions for fraud.

Apparently the corrupt PEPs were themselves defrauded by the recipient of the stolen millions, who used them to splurge on three homes, a penthouse apartment, a business jet, a yacht, a Lamborghini and something called "The Mountain," a property in Beverly Hills. The fraudster also bought $40,000 of boxing memorabilia. The entire case would be comical if it did not involve defense funds doverted by corrupt government officials for personal gain. They have been named in a number of major media articles; all are very senior in rank.

The Mountain, Beverly Hills, California

Now the US Government is seeking to seize and forfeit the properties and money as it is the proceeds of crime. 


CD Palestino, a Palestnian football club in Chile

While there has been extensive press coverage of the illicit shipment of sanctioned Iranian crude oil and petroleum products to Asia, especially when brokered through the efforts of Alireza Monfared, who operated out of the Malaysian offshore financial center in Labuan, there has been no public media coverage of Iran's covert oil sales to the countries of Latin America, which were extensive.

There is little in the way of details regarding Iran's oil sales operation in Central and South America; we know that the original plan was for the countries obtaining oil to pay for it through the shipment of agricultural products grown locally, but there is no information that this ever occurred. Reliable sources have stated that the purchasing countries defaulted upon their payment to Iran.

New information received indicates that the transactions were brokered by Palestinians, though where these brokers are located is not known. There is a direct connection between Palestinians and Iran; it is Hamas, the designated global terrorist group operating in Gaza. Is it the Hamas representives to Iran who are the brokers ? Unfortunately, there is no further information available at this time. Compliance officers in North America, not being aware of the illicit traffic in Iranian oil, could unwittingly accept funds from these Palestinan brokers, and follow orders to transfer them, albeit indirectly, to Iranian control. Thus lies the problem; OFAC monetary penalties can be severe.

What are the other possible choices ? Chile has the largest population of Palestinians outside of the Middle East. It is estimated that there may be as many as 500,000 Palestinians in Chile; others live in a number of countries in Central America, including Honduras and El Salvador.

Compliance officers whose clients or customers' clients deal with crude oil brokers n Latin America should be alert to the possibility that those brokers may be handling Iranian oil. have you performed due diligence on the staff of the broker ? Do any of the staff members have Arab names , and therefore could possibly be Palestinian ? Palestinians are known to be the largest group of Arabs living in the region. Are the funds going to a known intermediary country for payments to Iran ? Banking clients in the petroleum industry, who reside in Latin America, could be a high-risk endeavour.

Check out your existing clients to insure you are not banking a Palestinian oil broker.

Friday, July 17, 2020



Nobody in Malta seems to be concerned about the Finance Minister's disclosure that 237 Maltese taxpayers have been investigated, for tax evasion and fraud, after their names appeared in the Panama Papers, meaning that they obtained tax haven corporations and private bank accounts through the now discredited Panama law firm of Mossack and Fonseca, which is known to have existed only for the purposes of facilitating tax evasion and money laundering of bribes, kickbacks and illicit payments to Government officials and Politically Exposed Persons (PEPs).

According to reports, a large number of the investigations have concluded, resulting in revenue received by government in excess of fourteen million Euros, through many cases reportedly remain open and are still pending, years later. Nowhere are there any statistics to detail how many of their tax evaders were sentenced to prison, because none of them are in jail; Let's discuss why.

The Attorney General sent a letter to the police advising them not to investigate a case where the prominent targets' names were in the Panama Papers, alleging that there must be a high level of reasonable suspicion before they could access the records of the local Mossack anf Fonseca branch of corporation service agent; otherwise their inquiries would be highly intrusive and counterproductive, and possibly result in damages against the police. They obviously took those warnings seriously, as they subsequently did not charge ANY of the tax evaders with financial or tax crimes, not just the targets named by the AG. No wonder money laundering is flourishing in Malta.

Their tax evasion cases were thereafter quietly settled on the civil side, well out of the view of the press and public, lest the level of true level of tax evasion and bribe taking in Malta be exposed for all the Members of the European Parliament to see. Perhaps now the police may see their way clear to charging the egregious offenders with felonies, and perhaps the corporate service agents who facilitated the money laundering through Panama should also be named as co-conspirators, for they certainly knew that their services constituted Conspiracy to Commit Money Laundering.


It's the end of an era, unfortunately. British Airways has announced that it has retired its entire fleet of  thirty-one Boeing B747 airliners early, due to reduced passenger demand bcause of the COVID-19 pandemic. The jumbo jets were previously to be kept in the BA fleet unti 2024.

This is a sad day for compliance officers who travel long distances to see clients, or attend conferences, for the Upper Deck of the 747 was a refuge from the noise and distractions of international air travel. It was reserved for Business Class, and there's weren't many seats. The steep, narrow stairway leading up there insured that crying babies, intoxicated tourists on budget holidays, and other noisemakers would not make it up there, leaving those privileged to have a seat upstairs peace and quiet to work, or simply rest, before arriving on the other side of the Pond or in Asia.

I have found that the Business Class seats in the B777, which are on the same level as everything else, suffer at times from the noise and chaos which affects the rest of the aircraft. I for one am sad to see the 747 depart from British Airways' stable.


According to local sources in Cape Verde, the country's Attorney General has recommended the extradition of the fugitive Colombian money launderer, Alex Nain Saab Moran, to the United States, and the government has approved it. Saab faces major money laundering charges in US District Court in Miami, and if convicted could be sentenced to twenty years in Federal Prison. He  has been the subject of sanctions in the United States.

Saab has the right of appeal to the country's Appeals Tribunal, and it is assumed that his attorneys will exexcise that right. His lawyers claim Saab is a Venezuelan diplomat on a "humanitarian mission" to Iran, to secure food for Venezuela. Saab has a diplomatic passport from Antigua & Barbuda, and owned offshore banks in Antigua and in Dominica (2).


When money laundering and financial crime rages out of control in a particular jurisdiction, the most effective weapon in the American toolbox is surely that much-feared SDN designation issued by the Office of Foreign Assets Control, known to compliance officers as OFAC. Whe OFAC speaks, bankers around the globe listen, for they do not want to end up themselves with Civil Penalties that are not only costly, but are a black mark upon the reputation of any entity which is the subject of a published, and therefore very public, OFAC Notice.

To undestand the impact of an OFAC designation, all you have to do is look at the extreme lengths that sanctioned individuals and entites will go, both in court and through administrative efforts, to remove or soften that dreaded SDN designation, for it effectively bars them from accessing the American financial structure, and puts a bulls'-eye on their back, marking them as unacceptable high-risk to all whom they want to deal with.

Thus, should OFAC begin to designate the worst money laundering bad actors operating in the Republic of Malta, whether they be corrupt corporate service agents, Politically Exposed Persons (PEPs), Panama Papers subjects, or sundry other financial criminals, its sanctions will land hard on these important targets directly, and have a major impact, not only on them, but all others who have heretofore worked for them with impunity. To clean up Malta's financial illness, you need a doctor with powerful medicine. Designating a number of Malta's worst offenders, whose corruption and money laundering seems to know no bounds, will deal them a legal knock out blow.

Thursday, July 16, 2020


There is a recently-issued outstanding Federal Bureau of Investigation Intelligence Buletin, on the use, by criminal elements, of private placements offered by hedge funds and private equity firms. It includes several examples, offered anonymously without naming & shaming, of how Russian organized crime, Mexican cartels, and lawyers operating through the Cayman Islands, Guernsey and Luxembourg, successfully cleaned hundreds of millions of dollars, circumventing traditional AML compliance programs.

I recommend the white paper, but most compliance officers, who should be reading and anlyzing it, will never see it. The reason is, although the Unclassified bulletin, obviously intended for public use, and using only open-source information, has been designated by the Bureau as Law Enforcement Sensitive, and not for general use. The FBI actually posted a notice on the bulletin, prohibiting its open distribution, and requiring FBI approval to post or publish it in the original format.

Notwithstanding the foregoing, someone did post the bulletin, in its original form, to the Internet. Given the fact that the document contained no information about pending investigations, nor did it anywhere discuss sources and methods, I can find no earthly reason why someone took it upon themself to essentially make it unavailable to the people who really needed to see it, the compliance sector, both at banks and broker-dealers. The document did not fit into the requirements that caused it to be Law Enforcement Sensitive. That is, to repeat, an Unclassified document rating.

Please do not regard these comments as those made by an uninformed individual; I have held a high-level security clearance while serving in the US military in a combat zone, and I spent several years working with, and representing, law enforcement officers. There's nothing in the bulletin that its release, by any stretch of the imagination, can harm law enforcement, undercover work, the administration of justice, or expose any tradecraft or investigative technique that should best be withheld.

Restricting the free flow of critical information to compliance officers, by designating it "Sensitive" serves no purpose, and allows the criminal element to take advantage of the fact that much open-source information in the hands of law enforcement is hidden behind a wall of restrictions which are not justified by making it unavailable through minor restrictions placed upon it, for no legitimate purpose.



The media are covering the trail of the GULF SKY, a Dominican-registered* oil tanker involved in smuggling sanctioned Iranian Crude, and which was the subject of an intense search recently when it turned off its transponder off the coast of the UAE, only to show up again taking on an illegal cargo of oil off the coast of Iran. We have previously covered the use of Dominica as a registry of convenience for vessels engaged in oil smuggling from Iran, and also into North Korea, but this case is more significant, as it involves money laundering.

Two Iranian nationals, AMIR ABDOLAZIZ DIANAT and KAMRAN ALI LAJMIRY, sought to purcase the vessel, then known as the Nautic, by laundering the $10m purchase price through US banks, a violation of a number of American laws, including the ITSR and the IEEPA, and several Executive Orders signed by the President of the United States. They established front companies to make the purchase appear to be from an Indian company named TAIF MINING SERVICES.

In truth and in fact, Taif was created on behalf of third party companies, as a front to hide the beneficial ownership of the Iranian nationals, through unnamed Iranian companies. The post office box address was in Oman, and ownership was nominally held by two Omani nationals, but Iranians maintained the true ownership of the vessel. There was no effort to obtain an OFAC license.

The buyers sent over $12m through correspondent accounts in the United States, where they were frozen by the bank while transiting the United States. The sellers not having received payment, they made inquiries and started tracking the vessel. After the aforementioned vessel intentionaly "went dark," meaning that it disabled its transponder, to elude the owner, as well as the United States, which was tracking it. Media reports say the vessel was "hijacked," which appears to be part of a scheme to hide it from its lawful owner.

On May 1, 2020  both of the aforesaid Iranian nationals were sanctioned by OFAC, under Counter-Terrorism (CT) designations. Will the unpaid seller take possession of this tanker, in Iranian territorial waters, or elsewhere, or will Iran now keep its prize ?

Research Note: United States vs. Dianat et al, Case No.: 20-mj-00020 (DDC).
*We must assume that it was the convicted Iranian sanctions evader (and thief of billions) ALIREZA MONFARED, formerly the Ambassador of Dominica to Malaysia, now serving 20 years in an Iranian prison for "Corruption on Earth", who started registering Iranian oil tankers in Dominica, when he operated out of Labuan's financial center, and had the fully-laden tankers anchored offshore, until their cargo was sold in Asia or Latin America.